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Power Lunch

News/Business. Today's news on the economy, markets, real estate, media and technology. New. (CC)

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Chicago 10, Tyler 9, Us 7, America 7, France 6, U.s. 6, Jimmy Hoffa 5, Merrill Lynch 5, Spain 5, Amc 4, Tim Cook 4, Europe 4, Google 4, Schwab 4, Apple 4, Bob 3, Madrid 3, California 3, The S & P 3, Bob Pasani 2,
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  CNBC    Power Lunch    News/Business. Today's news on the economy,  
   markets, real estate, media and technology. New. (CC)  

    September 28, 2012
    1:00 - 2:00pm EDT  

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thinks is going to happen to the s & p over the year ahead. and a whopper of a settlement. bank of america, merrill lynch. it is a $2.5 billion pay day. find out who wins big when we talk with the person behind the suit. meantime down to sue at the nyse. hi, su. >> hi, ty. as you mentioned we did start with the markets on the down side today. that chicago pmi was a big weight but the news out of spain functioned kind of like a hot air balloon, lifting the market up a little bill. we're now down to about 48 points on the on the dow jones. we've come well off our worst levels of the trading session. >> that's right. and tyler is right, chicago pmi big disappointment. but we came up off the lows as the spanish bank recapitalization came in just about in lines of expectations. s&p 500 well off of the lows. i think what would happen in the middle of the day, sue. the euro was weaker but it's off the lows as we saw what was
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happening with the bank recapitalization. the dollar was stronger but it's off of its lows. when you see that, we see the sectors all on the weak side. so materials and energy stocks usually have a tough day when the dollar is stronger. that's what's happening today, sue. >> good to see you, bob. see you later. ty, back to you. >> thank you very much. wall street focused on madrid and the middle west. odd bed fellows you might say. but maybe not so much the midwest because of bad chicago pmi numbers. madrid because the spanish bank stress test wasn't so stressful, wasn't so awful after all. welcome to both of you. i want to know why the focus would be more on spain today than perhaps even on the midwest pm ikz or the chicago pmi. but you have some news you want to break. >> real quick the financial oversight council putting out a statement at 1:00 basically saying they will take up this very thorny controversial issue of money market regulation in
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november. what they did today is they directed their staff to present recommendation, at the november meeting for how to remove the systemic risk that they believe is created by money markets. the s.e.c. dropped the effort because they couldn't get the commissioners to vote on it. there was a lot of opposition including the biggest mutual funds, tyler, had fiercely opposed these new rules. so that's out there. >> moving on from that to the question of why is the market down today, i think we always in our business and on wall street, we look to find the immediapredn any given day. today people may be thinking i want to take money off the table, take profits. chicago pmi, down it went. it wasn't as good as people had expected. that suggests the economy may not be so hot, right? >> set the stage. we just downgrade the second quarter. we went from 1.7 to 1.3. we talked about that yesterday. >> this i consistent with that. >> exactly. we thought third quarter might have a two handle on it. we're taking that two handle
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off. before i came on goldman sachs has a report saying they're looking at 1.9. i see some over 1.8, 1.7. slow mediocre growth continues. i think the key being, can we resolve the issues that have hung over the american economy from spain? >> is madrid more important than chicago? >> at least it is today. we wanted to see what the needs would be for the spanish banks. the numbers that they put out today after this exhaustive examination. >> do you breath numbers? >> the market believes them now. they came about in line with expectations. the number could change depending on what happens with the spanish economy and if real estate prices fall even further. you think more of this like a tradeoff. if the capital requirements had been even bigger it would have meant they were going to clear the real estate market faster because they would have pushed prices even lower and vul turs would have gotten in there. >> i think we need to talk about your question which is do you believe it? skeptics i know. >> we spent two years waiting for them to -- this should have been done three years ago.
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>> yes. >> there was an independent consultant here. if we'd done that, it is a major step forward to where we should have been back two years ago. >> do you believe the numbers? >> yeah. i think these numbers are decent. absolutely. >> if anybody's going to be skeptical i know you will. >> michelle in the last hour talked about a 12-step program for fixing your financial crisis. the first one being acknowledging the problem. if they had done that now we'd have the issue do they have the capital to fix it. >> just remember this is not static. if their economy worsens, things could change. >> they need to make amends. thanks very much, folks. appreciate it. now out to rick santelli at the cme. i'm sure there was much in that discussion that intrigued you, rick. >> there was a lot as a matter of fact. but i have to tell you many of the people i talk to are skeptical. but yet they're still trading as though they believe it. and that's the unique aspect. look at the charts. 10-year note yields. yields obviously moved higher when the spanish news came out.
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yields moved higher. in both instances you still didn't get up to unchanged yields from yesterday. both markets are down on the week in terms of yield. look at the euro currency kind of similar. there definitely was a bit of a delayed rally in the euro but it couldn't get up to unchanged. where it sits at 28.75 is the far cry from the 2980 it closed last week. the next two charts are fascinating. like frick and frack. the first one is year 2 of the ltd. that's at all-time highs. but not so long ago the xyg the high yield was more in vogue and that is slipping a bit. i always find it interesting in a world filled with liquidity how they vacillate between the junk and corporate grade. sue back to you. >> thank you very much, rick. the head of u.s. equity and quantitative strategy over at bank of america merrill lynch. with three months to go in 2012 she is already making her calls for the s & p in 2013. she's one of the first to do so. and she's talking to "power lunch" first as well.
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welcome back. good to see you again. >> great to see you. thanks for having me. >> you're calling for a record high in the s & p next year. what's going to propel it to that extent? 1600 is what you're looking for? >> 1600 is our price target for year end of next year. i mean, i don't think it's going to be a straight line up from here. in fact we're pretty cautious about the next couple of months. with the election, with the fiscal cliff coming up. i think that now is a good time to take profits for the year. 14.50 is our price target for the year end. next year i have to say i'm probably skewed to be more negative. but there's a couple of data points that i can't ignore. one of which is sentiment. we track wall street sentiment. and we found that it is actually at the lowest levels we've ever seen since we began tracking this measure back in 1985. >> wow. so that's the contrary indicator. >> exactly. there's a lot of hatred for equities. a lot of negative news priced into the equity market at this point. i think that it's more likely to surprise on the up side rather than the down side.
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there's a lot to be negative about at this point. i think there's the fiscal cliff, there's europe, there's china. so a lot of the headlines that we see are fairly negative. but the fact that everyone is at a point where they are underweighting equities relative to bonds more than they ever have tells me equities could actually surprise to the up side. >> it doesn't sound like you are all that worried about the overhang of europe into next year, especially if we're starting to see some progress from spain. >> so europe i think is starting to be discounted in the numbers. if you look at earnings revisions we've noticed that trends for companies with a lot of european exposure, they've already seen pretty big hits to earnings expectations. so i think that a lot of that has actually sort of worked its way into the market. what i'm a little bit more worried about is the cliff, the fiscal cliff. we've been looking at kind of guidance from corporations and seeing where they're seeing the biggest risks. what i find pretty amazing is that nobody's been talking about the fiscal cliff up until last
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quarter. we counted the number of companies that actually explicitly referred to fiscal cliff in their transcripts. we found that only about less than 10% of companies are actually citing this as a major risk, which i think is something to be a little bit worried about as we sort of near the that . >> okay. so they're underestimating the potential impact of that. >> yes. >> go ahead. >> nope. finish your thought. >> i think that there are some sectors like for example health care which is probably most directly impacted by fiscal spending cuts. that is one sector that's actually sort of -- it's pretty cheap at this point. it might be discounting more risk. but if you look at other sectors that are more indirectly impacted, for example the consumer sector, if we do have a reversal or if we do have more onerous tax policy for hiring consumers we're not really seeing any sort of a discount valuation in the luxury goods retailers. so i think that that's norris,
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that might be. >> there was a cheer down here when they saw your forecast for 1600 on the s & p. they hope you're right certainly. thanks for joining us. appreciate it. >> thanks for having me. now to jackie with market flash. >> good afternoon, sue. i've got one to watch right now. it's all scripts. it was halted on reports it was exploring a sale to private equity. it resumed trading. you can see the spike there. up more than 15% at this point. 1249 or 1.61 some pierce are also up on the day. athena health, turner, quality system. you can see those percentage gains on a day we're trading lower so really bucking the trend. tyler. bank of america agreeing now to settle a record-breaking class action lawsuit with the ohio attorney general for $2.4 billion. the suit covering investors who purchased bac securities at the time the bank announced plans to acquire merrill lynch. bank of america's ceo brian
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moynahan saying in a staemt "resolving this litigation removes uncertainty and risk and is in the best interests of our shareholders." mike dewine is ohio's attorney general, lead plaintiff in this case. how much of the $2.4 billion goes to ohio? how much to other plaintiffs? and where specifically does that money go? does it go into your general fund or to people who were affected in the ohio retirement systems, et cetera? >> well, we were part of the lead plaintiffs, colead plaintiffs, because of our retirement systems. we have two retirement systems. state teachers retirement and our general beos retirement system. they're going to get approximately $20 million from this. but we also in ohio have about 70,000 individual investors. and nation-wide we could have four, maybe even as high as 5
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million investors. so a lot of people in a lot of institutions could potentially benefit from this settlement. >> so did i understand you correctly? 20 million of the 2.4 billion goes to ohio and to the members of the retirement fund? that seems like an extremely small amount. >> well, we're the lead plaintiff only because that we were appointed as the lead plaintiff. but we're representing in this case -- it's a class action. so we were representing potentially 4 million, maybe 5 million investors. so it is a proportionate share. we're very very happy with. this we think it is a just settlement. bank of america did things they should not have done. they did not disclose the information. they didn't disclose, for example, with merrill lynch when they were going into the merger that merrill lynch had had this
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huge $15 billion fourth quarter loss. they hid that from the investors. they hid over $3.6 billion in bonuses that merrill was going to pay to its top executives. just outrageous conduct. >> this goes back to that time where the companies were doing or bac was doing due diligence supposedly and there were questions as to whether there was a material change in condition and whether the whole deal should have been scrapped. now, we should point out that bac says we deny these charges. what is a person to believe when they hear that a company is going to pay $2.4 billion but says, hey, we didn't do what they said we did? how shall i think about that? >> well, i would believe that they did it is what i would believe. because they did. and no company is going to pay that amount of money unless there is the evidence is there. now, this is a settlement.
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and we were set to go to trial. and this was worked out by both parties. and woe think it's in our advantage, they think it's in their advantage. >> that's basically a rhetorical figure leaf. bottom line you're happy with this settlement and with the moneys that will accrue back to the retirees and to the state of ohio? >> well, i'm very happy with it. we would not have settled this. and they would not have settled it, bank of america would not have settled it, unless they felt that they had a liability. clearly their lawyers wouldn't have let them do that or they wouldn't have made that as a business judgment to do it. so we're very happy with. this this is a good day for our pension people. it's also a good day for the 70,000 people in the state of ohio who invested and lost money because of their bad acts. >> one little tiny one. ohio is the swing state, maybe the ultimate swing state in the elections. which way is it going to swing, mr. dewine? >> it's going to come very very close. but romney is going to win it in a close race. >> thank you very much, mike
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dewine state attorney general, former state for. it doesn't happen very often. it did today. the ceo of the biggest company in the usa said i'm sorry. and you'll never guess where the next victoria's secret underwear store is going. hmm. more power in two.
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we can't make this one up. victoria's secret is opening a store at cowboys stadium in arlington, featuring the limited edition pink nfl collection. most of the new store is expected to promote the cowboys, the nfl's most valuable team. it is the first time victoria's secret is opening a store in a professional sports ven yuchlt the opening ceremony is monday. that's must-see tv. just hours before the cowboys host the chicago bears. why do i think, tyler, that the pre-game show might get some pretty decent rate sngz. >> i think that's right. i can't imagine that espn is going to show any of this. i'm waiting for john gruden to use the telestrator on this one. don't go there, folks.
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rough quarter for the social media stocks except for linked in. it is up 55% in three months. facebook, however, down 43%. pandora 14%. groupon off 92%. facebook is rallying today, though, avilan muching its e commerce gifts feature as we head into q 4. we want to hit another channel check. cnbc's running theme all day long. julia borsten on the social media. >> here's what to watch for in the social sector in the quarter ahead. it's all about growth. can social companies like facebook, zenga and groupon return to accelerating growth. will advertisers ship more dollars than just social? on october 23rd facebook reports its quarterly results. we'll be looking for updates on how the social network plans to make money, particularly from its fast-growing mobile user base. zynga mobile users are waiting to see if it can gain in
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declines. we'll see if groupon can turn its new ventures like mobile payments into new profits. for social i'm julia borsten. don't miss julia's exclusive interview with facebook's sheryl sandberg. it is her first interview since the ipo came out back in may. it is only on cnbc on monday. sue? ty, we are watching apple as you know. the iphone 5 rolling out worldwide today to 22 more countries. apple is down 1.33% at $671 and change. it comes as ceo tim cook issues a very rare apology over the iphone 5's map app fiasco. i checked with reporters in silicon valley with the fallout. john. >> sue, those apologies getting more and more common. it's not a man who's afraid to say i'm sorry. a lot of focus today on that apology. what investors should really be thinking is what comes next. the fundamental issue here is
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this is not a problem that good hardware design or smart software can fix. map making is grunt work. someone has to go in and find problems and in some cases update things by hand to make sure they look right. tim cook's apology this morning gave little detail about how exactly apple's going to tackle that. i know people close to apple there are three major approaches. updates from third parties. direct and passive data that apple gets from your phone telling them things like hey this isn't a one-way street. it's a two-way street. we can tell because someone's going that way. then there's the local search within the map's app telling people what people are interested in. i talked to a few experts today about the position apple is in. the feedback i keep getting, apple can't fix this by just working faster. the earth is an impossibly large data set. google has cars driving around all the the time gathering information. the apology is a shot at humility. admitting a problem. because until now the official line from apple was these are amazing maps. two by taking the painful step
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of recommending competitor's mapping apps in this apology it looks like he's buying time to come up with a better strategy. what will that strategy be? my money says it will have to involve more effectively getting users to improve the quality of maps. apple is years behind here. doesn't have self-driving cars. and active user bait is its biggest advantage. it's got a little report, a problem link within the map's app now. something tells me are going to have to do more than that. >> john ford, thank you very much. it is official. a 75% tax for the tres rich on france. if you're super wealthy that is the only place where you do not want to live. the rest of a list that will have you shaking your head coming up. plus a $10 million burglary bust. jane wells on the case. >> reporter: tyler, what happens when you offer $1.7 million as a reward for stolen art? the paintings are found. money talks. mystery solved. when "power lunch" comes back. [ male announcer ] when this hotel added aflac
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last week we told you about a $10 million burglary at the home of a cnbc guest. the police have solved this one. >> reporter: this is one of those crazy stories, sue, even by l.a. standards it's very crazy. the great l.a. art heist is over. jeffrey gunmark's stolen collection has been recovered
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after police receiveded a tip yesterday. the paintings include the paint you can see on the left for which gunlach offered a high reward. jasper johns and joseph cornell pieces, a half million was offered for the safe return of those two. the manager of an al and ed's auto sound audio store in pasadena, what? where police say they found most of the paintings. and will mar kadez who allegedly had four paintings at his house. the last painting was recovered at a residence in glendale where it may have been in the process of being sold. police say that resident is cooperating, not under arrest. they say there could be more suspects in this case. the tip came two days after gundlach's press conference offering $1.2 million for the safe return of the painting. he says he has improved the security of his house and has
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gold getting set to close for the week. and for the quarter as well. looks like we're closing down fractionally for the week. gold snapping at five-week winning streak here on the nimex in euro terms we saw a new high record for gold. gold actually put in its best performance and for the quarter since september of -- since the second quarter of 2010. but take a look at the metals overall. all of them having a pretty good quarter. platinum with the problems in south africa up double digits. but silver is the big winner. up 25% in the third quarter.
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>> let's get the trading action down here. bob pasani rejoins me here. >> reporter: the chicago pmi dropped stocks initially. but then of course for the second day in a row spain mattered here. spanish bank recapitalization was roughly in line with expectations. >> it mattered to the up side a little bit. >> exactly. who knows where the bad bank is going to be going. the s & p we rose off of the lows. the euro as well moved to the down side. it was weak earlier on but off its lows. when you get a strong dollar that typically puts a lot of pressure on the risk off sectors. material stocks, energy stocks on the weak side as you see in some of the sectors. still a lot of questions about the fourth quarter. a lot of people wanting to bet on the global slowdown. they want today do that in the third quarter. didn't do so well for them. as long as the central banks keep stimulating and europe keeps managing the somewhat smooth transition here by the dips it's going to be it. a lot of people are looking for declines. i think they're looking for declines to buy stocks lower, not to get out of the market at
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this point. >> however next week just looking shorter term we have an awful lot of important data culminating with the jobs report on friday. >> more importantly there's going to be economic -- not just economic data but earnings date that we're going to be getting in the next few weeks. notable earnings award recently. it's not killing the stock market. it's been disappointing and worrisome. transportation stocks down for several months in a row. i think that's a big issue. >> bob, thank you so much. jackie deangelis rejoins us right now with a market flash. >> reporter: on my radar this afternoon, edwards life sciences bucking the trend up 1.6% today after jeffrey boosted its revenue estimates starting this quarter saying it's seen strength from the company's heart valve. also raising its price target by 10 bucks to 125. keep in mind the fda is expected any day to approve an expansion of sepina's use to high-risk surgical patients noted by wells fargo yesterday. seeing a spike in this stock, at
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107, spot 22. the nasdaq with sema. >> reporter: a lot of big movers in tech. research in motion the best performing stock on the nasdaq 100 after reporting earnings last night. of course all eyes on that blackberry 10 device slated for the first half of 2013. facebook another big mover up 7%. pete najarian saying the sheryl sandberg interview on monday could be a catalyst to the stock similar to what we saw after mark zuckerberg spoke at that tech crunch conference. qualcomm, ubs writing that the near concerns related to the shipments could hit a soft patch in the next quarter. today's power player is the chief investment strategist with oppenheimer funds with $82 billion under management. please welcome art steinmets to "power lunch".
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how do you feel about the market overall. bob laid out some interesting trends and we're going into a new quarter. overall are you bullish on the market? >> reasonable comfortable with the market. the story, the bad news is understood. we've got sovereign debt crisis. we've got fiscal cliff. we've got china growth slowdown. those have been with us for years now it seems. those are the known unknowns. but what we have now is you've got the fed pumping up liquidity like crazy. you've got the boj pumping up liquidity like crazy and the ecb doing the same. don't fight the fed or the ecb or the boj. so that undergirds everything that's going on right now. >> yet if you look at where we were on the s & p right after the fed move and where we are now, basically we've kind of retraced everything that the market put in place after the fed. >> sure. >> so as you look forward, how do you invest in an environment that looks like we're going to have easy money for a long time? you've kind of changed the typical asset allocation most
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people go to. >> oh, yeah, it's a crazy world. at oppenheimer we're talking about the new 60/40. people's portfolios are perfectly positioned for the past. they're positioned for 2008. we're still seeing 30 billion a quarter flowing into core bond funds, which are yielding negative in real terms, below inflation. that's madness from our point of view. investors have to understand that the notion of what is safe and what is risky has to be adjusted a little bit. safe doesn't mean securities that have a lot of interest rate risk and no yield. that is not what safety means to us today. again, given the plentiful liquidity and what we think is a moderate global recovery, we think it's safe to move out into more credit-oriented investments, more higher income investments. >> high yield corporate? >> high yield continues to look good in our view. it's come that lot but far from how tight it can get. there's alternatives out there. there's lots of things. people's portfolios just have to readjust. i think it's a train wreck, really. people's portfolios are just not
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going to get them to a secure future right now. it's really disastrous potentially. >> you think the fear trade that was put in place in '08 is still in existence. >> look at the flows. 30 billion a quarter going into safe quote unquote bond funds. that's gone on for far longer than the dot-com bubble did in '99. so the sailors are all on the wrong side of the boat in our view. >> how do you encourage the individual investor to take on that risk? they've gone through several years of almost no return in their portfolio and they still seem comfortable with that. >> sure. >> how do you bar bell, if you will, a portfolio? you put high yield on one side and then some equity exposure on the other? >> it has to be adjusted for people's risk tolerances of course. but people are overpaying for safety. that's the key issue. they have to move a bit more out in the spectrum. and the way to get people comfortable with that is to recognize what risk means today. again, negative yielding treasuries are risky.
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the 10-year treasury bond used to have a duration of six years or so. now it's out there getting close to eight years. so the interest rate risk, the price of -- the risk of principle loss is much higher today in a 10-year treasury than it was a few years ago. people just need to appreciate that a whole lot more. >> good points. thanks for joining us. ty, back to you. headline time. summit mid stream partners soaring on its first day of trading at the nyse. the company owns natural gas pipelines. shares at watson pharmaceuticals all-time high levels back to its ipo in february p of 1983. and transocean announcing a $7.5 billion contract for four new ultradeep water drillships. technology down just a bit today but it of course has been on a tear in the third quarter. the sector up more than 10%. so is there more room to run? what you need to know as we head into the fourth quarter. plus an absolute nightmare.
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re -- robert frank is all over it. that 75% tax on the rich in france is now on the books. but you don't have to be french to be worried. i'll explain what it could mean for the u.s. and other countries around the world. more on la power lunch that's about the extent of my french, tyler. back to you. >> all righty. thank you. we'll be right back. let's -- let's start over from the beginning. we were just driving along, comin' back from the lake, and all of a sudden, ka-plam. it blindsided us. what is it?
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working, working, working. and now you're talking about, well you know, i won't be, and i get the chance to spend more time with my wife and my kids. it's my world. that's my world. ♪ higher. ette that considers provenge medically necessary for the treatment of adults with metastatic castrate resistant prostate cancer symptomatic or minimally symptomatic. it is popping the stock right now on that bulletin. the timing of the release of the bulletin is unclear. again up more than 7%, $4.99.
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tyler. >> jacky, thank you very much. in today's yahoo! finance poll we asked why rim is sharply higher this week. which mobile device would you want your office to use? survey says 46% iphone. 18% blackberry. 36% say droid. now let's see what's coming up on street signs. hey, mandy. coming up on "street signs" top of the hour, forget the fiscal cliff. we might have a bigger problem on our hands. we're going to show you the one chart that means the most to your money right now. then, the map app flap. has apple lost its way with issuing an apology? and the scariest stat of the day. you will not believe just how much money americans plan to spend this hallowe'en. it is not just on themselves, either. that all straight ahead. first back to you guys on "power lunch." >> m >> mandy, thank you very much. continental taking possession of its first boeing
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787, dream liner, making its first u.s. airliner to get the jet. will the plane help improve united's operations and image which has taken some dings? could be a tall order. phil lebeau, continental's ceo. >> ceo says that the dream liner is a game changer and things will improve operationally at united airlines. they certainly can't get any worse than they have been this summer. we'll talk more about that a bit. here's the dream liner shot in the air yesterday over seattle. they take delivery of this airplane today. it goes into service in november. united, by the way, has ordered 50 dream liners. it will be over the next several years that you start to see those go into service. we talked about how united has had a rough summer. just how rough was it? poor on-time performance. 64% of their flights arrived on time in july. reservation system, the glitches, we talked about that last month. it went down for a couple of hours. frustrating customers. and passenger revenue. the company said yesterday that they expect the third quarter to
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be down between 1 and 2%. here's ceo jeff smyzek talking about united's problems this summer. >> we had a really bad operation this summer, phil. there's no question about it. we didn't deliver the product that our coworkers want to deliver. we didn't deliver the product that our customers expect. we threw a lot of change at our folks very quickly. we redeployed aircraft, did a lot of things at once. >> he said things will get better and they're already doing better he says in the month of september. clearly investors are frustrated, tyler. say look at this. united down almost 7% in the last year versus the nyse airline index which is up 18%. there's no doubt investors are looking at united and saying somewhere you have got to improve especially when you're looking at that passenger revenue number down 1 to 2%. that's a change in the last couple of days for the third quarter. that's something that had a lot of investors clearly worried. >> where will united use the 787? >> initially on domestic runs. the first flight is going to be
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from houston to chicago. but over time you're going to see it on long routes, say denver to tokyo. that's a route that you'll see the dream liner. and that's where most airlines eventually are going to be putting the dream liner. >> phil, thank you very much. the french officially unveiling a 75% supertax rate for the wealthy as part of the eurozone country's plan to bring down its deficit. so which other countries have super-high tax rates? and what are the implications here in the u.s., robert frank? >> reporter: well, franco francois allan brought bad news for the french today. this increases their tax rate from 48% to a whopping 75% income tax rate. this would apply to people who make more than 1 million euros a year. and france now by far has the highest income tax in the world. if you look at this chart you see france there at number one, second place is aruba followed by sweden, 56%. then the u.s. way down on the ranks at number 35. sort of in the middle of the whole list with its again 35%
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top tax rate in the u.s. early estimates said this 75% tax rate would only affect around 30,000 taxpayers. but i've been on the phone with a lot of french tax lawyers this morning. they said the number's far lower. maybe only 2 to 3,000 people in france would actually pay this tax. the reason is that this tax really only applies to salary and ordinary incomes. it doesn't apply to capital gains, interest income, dividend, what we would call kind of passive investment income. the rates for passive income in france would largely remain unchanged. the people most affected would be people like athletes, artists, maybe some doctors and lawyers. but most business people and executives they make their money from stocks and dividend. so not much impact for them. french lawyers tell me that they're not seeing a big panic here. the wealthy have been planning for this for months. but they do tell me that many young entrepreneurs and business people, they do want out. they're going to belgium, switzerland, portugal, a lot of people to california. imagine that, tyler. california now seen as a low tax state. well, it is for the french.
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and here's the other issue. will this give cover to the democrats in washington who want to raise taxes? compared to 75%, 39.6% remains small. >> all right, robert. thank you very much. of course the critics would say oh, you want to turn us into france which is kind of the ultimate gotcha in political discourse today. >> exactly. think the will play on both sides. >> robert, thank you very much. it has been a decent quarter by the way for the technology shares. the triple q's up about 10%. john for t john fort now with a tech channel check. >> reporter: here's what to watch in check the quarter ahead. launch mania. we might get an ipad minuty launch in october. pricer for another ipad and commentary on apple's october earnings call will be key. and the stakes are high for microsoft's windows 8 launch on october 26th. particularly for its own surface tablet running an on-base processer designed to take on
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apple. then there's amazon. this new flagship 9 inch fire h.d. goes on sale november 20th. analysts will be looking for signs it's gaining on the ipad or crowding out other challengers. that's your q 4 channel check for tech. speaking of tech, a rare apology from apple's ceo tim cook saying he's really sorry for the apple maps fiasco. saying sorry is hard, but was it actually the right move? all right. speaking of moves check out these moves. erik schmidt dancing gangnam style. see why he's so happy coming up next.
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the korean wrapper sy is hot. thanks to his viral music video gangnam style with its horse style gallop dance 300 million views and counting. take a look. >> oh, oh, this guy can move. look at that. now sy recently paid a visit to google's headquarters out in
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mountain view, california, to teacher rick schmidt a thing or two. my own high school classmate. he couldn't dance then. he can't dance now! from the photo we're not sure whether schmidt was just getting a groove or dancing for joy over apple's map apology or as sy would say, gangnam style. sue. >> thank you, ty. i think. it is time for the power rundown. joining us, jane wells is back with me and bob pasani. she's dancing gangnam style as well. >> hey sexy lady. >> after weeks of complaints -- don't get me started. iphone maps. apple ceo tim cook says he's extremely sorry for the anguish it's caused, suggests that customers use rye values like google's maps until the problem is fixed. right thing to do, jane, or not? >> oh, i think so. i mean if he's really sorry they'll make it right. get the google maps on there. talk to erik schmidt. get over this whole thing. i earlier said steve jobs would
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never apologize. in fact steve jobs apologized in the past. five years ago he apologized when he cut the price of the iphone back then $200 after it had only been out a few months. he apologized to the original buyers. apologies from the ceo at apple are not completely unheard of. >> what do you think, rob snert. >> my favorite tweet that's been out there. if you've ordered an iphone 5 shipment are being delayed because apple is forcing everyone to use apple maps to deliver them. that's what's going to be happening here. they'll get it together in the though.n it's going to take google's got a big head start. >> i postponed transferring over to the new operating system. >> me, too. >> i haven't bought mine yet. i'm in the clear. i'll get back to hq all by my little self. 35 years after his disappearnce, a lot of folks still want to know apparently where jimmy hoffa's body might be buried. giants stadium, perhaps? a florida swamp? or as new reports indicate under a driveway in suburban detroit. now bob i'm going to start with you. there were some people in the
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news that we had to actually explain who jimmy hoffa was. it's been a long time. >> yeah. he disappeared what, almost 40 years ago i guess from detroit. here's another reason not to get the iphone 5. there is no jimmy hoffa app on the iphone 5. i suspect android actually has one or are going to get one fairly soon. here's the way to do this. forget about investigations. i used google maps to find jimmy hoffa. if you put him in here it comes up federal reserve of washington, d.c. my theory is ben bernanke knows where jimmy hoffa is. come clean, mr. bernanke. let's setting this once and for all. >> the feds on line 2 for bob. >> it impressed me people didn't know who jimmy hoffa was. there's going to be a time i'm going to have to explain to people who o.j. simpson was. >> time goes by. >> unbelievable. very depressing. >> we can find o.j. we haven't been able to find the real killers yet though apparently. >> i'll leave it at that. in one of the best tweet
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smackdowns ever, oreo recently asked followers if they had ever brought cookies into a movie theater. yes, i have. which prompted this response from amc theaters. "not cool, cookie. a reference to its no food policy. oreo quickly fired back. fair enough but don't hate the player, hate the game. and back and forth it went with amc's answer game on, oreo. game on. jane and bob, what do you think? this kind of social engagement help or hurt the brands themselves. jane? >> i think it helps very much. particularly amc theaters which has twice as many followers on twitter as oreo. and it was clever and in fact the guy inside amc who's in charge of their social media wrote a blog about it saying one reason that it works in their case, and i think it does, no legal department involved. no approvals. you trust your people to write these tweets. and i think it engages a younger audience and makes you have a -- >> there's two reasons people smuggle otheros into the theaters. number one, who's paying $5 for popcorn that costs three cents?
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it's absurd. >> big bell. >> finally nobody knows what's in the food in there. what's in the nachos and hot dogs? in oreo you know what's in it. >> true. this was fun, guys. thanks a million. >> really who would follow oreo on twitter, anyway? that seems a little odd to me. anyhow, the week is coming to a close. that means it is time for you to go on facebook.com/cnbc and vote on whose ego took the biggest trip this week. was it the real referees in the nfl after the sports world called for their return post haste? perhaps it was the bacon lovers whose ego took a brugz after a shortage was announced. or did it belong to blackberry devotees. research in motion announced a new operating system, blackberry 10, shares jumping on the news. "street signs" will unveil the people's choice in the next hour. sue. also coming up in the next hour, the one chart that says we may be headed for a recession
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and what you need to do to protect your portfolio. as we head out, girl scouts of america unveiling some new redesigned cookie boxes. and some cookie stats for you here. they sell $800 million worth of cookies every year. thin mint the third best-selling cookie in the entire country. oh, oh. oreo's going to tweet about that. we're back in a minute. smart comes with 8 airbags,n3 a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety. oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign.
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welcome back to "power lunch." a quick check on ibm seeing shares popping about $2 on a headline by all things digital saying that ibm will soon unveil a new product supposed to simplify how companies manage and analyze large amounts of data. we're going to be watching for that. meantime that stock up nearly 2 bucks today. . as we slouch to the finish line for september and for the third quarter let's look at where the markets are right now on the dow and the s & p. kind of negative move. the industry also down 25, almost 26 points. 13460. naz nasdaq off 7 at 3129. s & p at 1444. as i look back on this quarter,
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we began this quarter with real trepidation about how this was going to be. we're up about 8.7%. we gant month saying september's always the worst month. we're still up 2.7%. >> we are. now, we do have a lot of data next week, ty, including that employment report. so buckle your safety belts, okay? have a great weekend, everybody. that does it for us on "power lunch." >> have great weekend, everybody. thanks for watching. "street signs" begins right now. welcome to this bizarre friday "street signs." because just as we wrap up a big third quarter for stocks, another piece of key data shows our economy is looking weak. so which one do you believe? facebook and ram both on the rise? when is the last time we said that? the news behind those moves. plus the troubling numbers behind chicago ala's big pension problem. we have news from both of those cities today. and apple ceo tim cook says he's

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